Wednesday 11th July 2012

Consumer confidence rises

by Alan Thornhill

Consumer confidence has jumped.

The Westpac–Melbourne Institute Index of Consumer Sentiment increased by 3.7 per cent in July from 95.6 in June to 99.1 in July.

The bank’s chief economist, Bill Evans, greeted the news enthusiastically, but remains cautious.

“Finally we have some evidence that the Reserve Bank’s policy of cutting the official cash rate by 125 basis points between November last year and June this year is starting to gain more positive traction with households,” he said.

“However, this result is far from convincing and should not be interpreted that we can expect confidence to steadily return to more normal levels over the months ahead,” Mr Evans added.

He noted, though, that there had been some positive news around the domestic economy.

“Petrol prices are down by 7 per cent since the last survey,” Mr Evans said.

They had fallen 13 per cent since May.

The Australian dollar had also rallied from 98 US cents to 102 US cents, while the share market rose 2.7 per cent, Mr Evans said.

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Alan Thornhill is a parliamentary press gallery journalist.
Private Briefing is updated daily with Australian personal finance news, analysis, and commentary.

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